CUSIP: Committee on Uniform Securities Identification Procedures

A 9-character alphanumeric code used primarily in the United States for the identification of securities. Example: '17275R102' for Cisco Systems Inc.

The Committee on Uniform Securities Identification Procedures (CUSIP) is a system that assigns a unique identifier to securities. A CUSIP number is a 9-character alphanumeric code used primarily in the United States and serves as the national standard for the identification of all kinds of securities, including stocks, bonds, and other instruments. For instance, the CUSIP for Cisco Systems Inc. is “17275R102”.

Structure of a CUSIP Number

A CUSIP number consists of three parts:

• Issuer Code: The first six characters identify the issuer and are alphabetic or numeric.
• Issue Number: The seventh and eighth characters, generally digits, identify the specific issue.
• Check Digit: The ninth character is a check digit used to validate the accuracy of the number.

Example

For the CUSIP “17275R102”:

• 17275R: Issuer code for Cisco Systems Inc.
• 10: Issue number.
• 2: Check digit.

Importance and Use

Financial Markets

CUSIP numbers are crucial for the smooth operation of the financial markets. They allow for precise and efficient tracking of securities and facilitate electronic trading and settlement.

Regulation and Compliance

CUSIP numbers are also utilized by regulatory agencies to monitor compliance with financial laws and track securities transactions. They serve as a basis for various reporting requirements.

Types of CUSIP Codes

• CUSIP U.S.: Codes for securities issued in the United States.
• CUSIP Global Services: Codes for international securities, known as CINS (CUSIP International Numbering System).

Historical Context

The CUSIP system was established in 1964 by the American Bankers Association to create a standardized method for identifying securities. This initiative was driven by the need for more efficient securities processing.

Applicability

CUSIP numbers are used in:

• Equities: Stocks and ETFs.
• Fixed Income: Bonds and other debt instruments.
• Derivatives: Options and futures.

Related Terms

• ISIN (International Securities Identification Number): A 12-character code used internationally.
• SEDOL (Stock Exchange Daily Official List): A 7-character code used in the United Kingdom.

FAQs

How do CUSIP numbers benefit investors?

CUSIP numbers simplify tracking and managing securities, ensuring accurate and efficient transactions.

Are CUSIP codes used internationally?

While primarily used in the United States, CUSIP Global Services extends the system to foreign securities.

Can a single security have multiple CUSIP codes?

Generally, a security will have one CUSIP code unless it undergoes significant changes, such as a corporate action.

References

• CUSIP Global Services
• American Bankers Association

Summary

The CUSIP (Committee on Uniform Securities Identification Procedures) system assigns unique 9-character alphanumeric codes to securities, facilitating their identification, tracking, and trading primarily in the United States. It is a backbone of the financial industry, ensuring efficiency and compliance in securities transactions.